TANZANIA – The Tanzania Bakers Association (TBA) has made a significant appeal to the government, urging it to reconsider its value-added tax (VAT) exemption policy concerning baking equipment and essential products like bread.
This request was articulated during the Baker’s Dinner Gala and Awards Night held on August 28, 2024, in Dar es Salaam, where TBA Chairperson Francisca Lyimo highlighted the pressing challenges faced by the baking industry.
Lyimo emphasized that the current tax structure poses severe barriers to growth for small business owners.
She stated, “Numerous tax charges present significant obstacles for the baking industry and impede the growth of small business owners while also contributing to the failure of many enterprises.”
The TBA argues that removing VAT from baking equipment would alleviate bakers’ financial burdens and improve public access to high-quality baked goods.
Since its establishment in 2021, the TBA has expanded from just over 30 members to 305, with around 1,500 individuals training in various baking aspects.
Lyimo noted this growth as a testament to the industry’s potential when adequately supported. She remarked, “The baking industry plays a crucial role in the country, particularly in ensuring the constant supply of quality and safe food. These products are not luxuries but basic necessities, consumed by people across all social classes.”
The call for VAT exemption is rooted in a broader concern about how tax policies affect small-scale businesses.
Lyimo pointed out that as bakers begin to grow and expand their operations, they face increasing levies and charges that drive up costs.
She suggested that “the government should have incubation for small-scale businesses in order to develop a base of future taxpayers,” advocating for a supportive environment that fosters business sustainability.
Challenges within the baking industry are compounded by external factors such as currency fluctuations and global events like the conflict in Ukraine.
Joel Laiser, Director of Business at Azania’s Group of Companies, shared insights into these difficulties.
He noted that rising wheat prices have significantly impacted operations but acknowledged recent improvements in infrastructure and electricity supply as positive developments.
Deputy Minister of Home Affairs Daniel Silo recognized the vital role of the baking sector in providing nutritious food for Tanzanians.
He encouraged bakers to voice their concerns directly to authorities to facilitate necessary changes.
“Recognizing the importance of the banking industry in promoting industrial economic growth and enhancing product quality, we advise you to utilize the tax committee by submitting all the challenges that hinder your business from thriving,” he stated.
Silo also commended TBA’s commitment to training bakers, which he believes contributes significantly to economic development.
He congratulated them on educating 1,500 individuals who are now actively involved in the baking industry and stressed that these efforts will ultimately drive economic growth and enhance national revenue.
Sign up to receive our email newsletters with the latest news updates and insights from Africa and the WorldHERE.
